Gold blasts to record $3,600 as weak NFP ignite Fed cut frenzy
Gold price rallies sharply and hits a new all-time high of $3,600 on Friday, following a soft Nonfarm Payrolls report, which raised speculation that the Federal Reserve (Fed) is ready to resume rate cuts. XAU/USD trades at $3,594, up 1.30% at the time of writing.
Gold jumps 1.30% as weak NFP data sinks yields, Dollar, and boosts speculation of larger Fed easing
The awaited jobs report in the US vindicated Fed Governor Christopher Waller, who said that the labor market had been showing some cracks since late July 2025. The data missed the mark by a bunch, the Unemployment Rate rose and Average Hourly Earnings remained steady.
Treasury yields around the whole curve, plunged across the whole curve. The most damaged was the 2-year Treasury note, due to its sensitivity to expectations of changes in the Fed funds rate. As of writing, the US 2-year T-note plunges over 11 basis points down to 3.48%.
Consequently, the Greenback is losing ground, as falling US yields push traders to the safety of Gold. The US Dollar Index (DXY), which tracks the performance of the buck’s value against a basket of peers, is down 0.70% at 97.57.
Bullion’s outlook looks positive as threats to the Fed’s independence following Trump's attempt to fire Fed Governor Lisa Cook undermines the Dollar, boosting Gold’s appetite.
Even analysts at Standard Chartered Bank went far, pricing in a 50-basis points rate cut in September, mentioning that last year’s July and September employment figures softened and resulted in a “big size” cut. They wrote, “We recognise that we are moving early, but we expect preliminary revisions to employment data for April 2024 to March 2025 (due next week) to support our 50bps call.”
Gold traders’ eyes are on next week’s Consumer Price Index (CPI) figures in the US. If the disinflation process evolves, this will cement the case for a rate cut in the September 16-17 meeting.
Source: Fxstreet
